Tuesday, May 21–Jim Wyckoff’s Morning Markets Report
World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
The Paris-based OECD think tank today reported that trade disputes between the U.S. and its trading partners have weakened global business investment. The OECD said business investment in 2019 will increase by 1.75% compared to a growth rate of 3.5% in both 2017 and 2018.
In other overnight news, Australia’s central bank says it will consider lowering interest rates at its early-June meeting. Australia’s economy and its currency have been ailing in recent months, due in part to the U.S.-China trade dispute.
The key “outside markets” today see the U.S. dollar index firmer and not far below this year’s high, which is a two-year high. Meantime, Nymex crude oil prices are also up and trading around $63.50 a barrel.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, and existing home sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are higher in early U.S. trading. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bullish early today. Today, shorter-term technical resistance comes in at Monday’s high of 2,876.50 and then at last week’s high of 2,894.00. Buy stops likely reside just above those levels. Downside support for active traders today is located at Monday’s low of 2,832.50 and then at 2,820.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 6.0
June Nasdaq index futures: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral to bullish early today. Shorter-term technical resistance is seen at 7,500.00 and then at Monday’s high of 7,559.25. Buy stops likely reside just above those levels. On the downside, short-term support is seen at the overnight low of 7,400.75 and then at Monday’s low of 7,361.50. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are near steady in early U.S. trading. Prices are still within striking distance of the contract high scored in March. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9- and 18-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term technical resistance is seen at the overnight high of 149 18/32 and then at this week’s high of 150 even. Buy stops likely reside just above those levels. Shorter-term support lies at the overnight low of 149 5/32 and then at 149 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.0
June U.S. T-Notes: Prices are steady in early U.S. trading and not far from the March contract high. Bulls have the solid overall near-term technical advantage. Shorter-term moving averages (4- 9- 18-day) are bullish early today. The 4-day moving average is above the 9-day. The 9-day is above the 18-day moving average. Oscillators (RSI, slow stochastics) are neutral to bearish early today. Shorter-term support lies at the overnight low of 124.05.5 and then at 124.00.0. Sell stops likely reside just below those levels. Shorter-term technical resistance lies at Monday’s high of 124.19.0 and then at last week’s high of 124.27.0. Buy stops likely reside just above those levels. Wyckoff’s Intra-Day Market Rating: 5.0
U.S. DOLLAR INDEX
The June U.S. dollar index is higher and hit a three-week high in early U.S. trading. Bulls have the solid overall near-term technical advantage as the index is near this year’s high. The shorter-term moving averages for the dollar index are bullish early today, as the 4-day is above the 9-day and 18-day. The 9-day is above the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at the contract high of 98.085 and then at 98.250. Shorter-term support is seen at Monday’s low of 97.720 and then at 97.500. Wyckoff’s Intra Day Market Rating: 6.0
NYMEX CRUDE OIL
June Nymex crude oil prices are higher in early U.S. trading. Bulls have some upside momentum. The shorter-term moving averages are neutral early today as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are bullish early today. Look for buy stops to reside just above technical resistance at Monday’s high of $63.81 and then at $64.00. Look for sell stops just below technical support at $63.00 and then at Monday’s low of $62.45. Wyckoff’s Intra-Day Market Rating: 6.0
GRAINS
Grain futures prices were again solidly higher overnight, with corn and wheat markets hitting three-month highs. Soybeans are higher, too, but in a follower’s mode. Wet, cool weather in the U.S. Midwest continues to keep farmers out of their fields. Monday evening’s U.S. crop progress reports showed corn seeding at only 49% complete, compared to a five-year average of 80% done. This week’s corn-planting progress figure is the lowest on record, for this date. U.S. soybean plantings were reported at 19% complete. The five-year average is 47% done. The wet, cool weather is also causing concerns about the quality of the winter and spring wheat crops in the U.S. Below USDA trend-line yields for U.S. corn, soybean and wheat crops are becoming more of a reality with each passing, wet, day. For the next week, rainy weather is expected for the U.S. midsection. A combination of short covering from big speculative funds who had record short futures positions up until recently, and bargain hunting are featured in the recent grain market rallies. For at least the moment, U.S. grain traders have pushed aside the U.S.-China trade war that had pressured grain prices for so many months.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission
(CFTC) has said about futures trading (and I agree 100%):
1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS.
Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
Jim Wyckoff